Chairperson of the Egyptian Exchange (EGX), Mohamed Farid, has submitted suggested amendments to the listing rules on the Egyptian bourse to the Financial Regulatory Authority (FRA) for consideration.
According to a statement on Monday, Farid proposed regulations for listing special purpose acquisition companies (SPACs), established solely to raise capital for the purpose of acquiring an operating business.
Under the proposed rules, the proceeds will be invested in fixed-income savings pools until the completion of the acquisition. In case an acquisition transaction is not executed within two years, the SPAC will be liquidated and the proceeds will be returned to shareholders.
Moreover, the proposals also include easing the process of listed companies acquiring non-listed entities by requiring their compliance with full governance rules and achievement of a positive average compound annual growth rate (CAGR) of revenues.
EGX stated that the proposed amendments have been previously reviewed in a meeting with Prime Minister Mostafa Madbouly, which included a number of entrepreneurs, led by CEO of the Egyptian ride-sharing app Swvl, Mostafa Kandil, in addition to Rania Al-Mashat, Minister of International Cooperation, and Mohamed Abdel Wahab, Executive Director of the General Investment Authority.
Farid said that the proposed amendments are a response to the rapid changes in the business models of startups, which is different from traditional companies.
If approved, the new rules would unlock new horizons for startups that have strong growth opportunities to expand through the capital market, increase the volume of their business, and make a greater contribution to the growth of the Egyptian economy.